J. Dinkins G. Grange is an attorney in Northeast Florida, helping his clients find solutions to their financial problems, which in some cases includes bankruptcy in some cases. This Blog contains general bankruptcy relevant information. His practice includes representing clients in various areas of civil litigation including Fair Debt Collection Practices Act, Chapter 7 and Chapter 13 bankruptcies, foreclosure defense and probate.

Monday, October 31, 2011

The following is a reprint from the Sacramento Bee, published October 28, 2011.

The California Housing Finance Agency
has softened its hard stance on borrowers who rent out their
properties, saying it will temporarily suspend any foreclosure actions
it has initiated against such homeowners.
The move comes after a report released Monday by the state Senate Office
of Oversight and Outcomes found that CalHFA, which makes low-interest
loans to first-time buyers, has filed foreclosure notices on 21
homeowners who were still current on their state loans.

The
report, dubbed "Good Deeds Punished," said that many of those borrowers
had moved out into larger residences but were forced to rent out their
first-homes because they were unable to sell them in the down real
estate market.

The agency's reversal was announced Friday by Senate President Pro
Tem Darrell Steinberg, D-Sacramento, and Senate Transportation and
Housing Committee Chair Mark DeSaulnier, D-Concord, who had asked CalHFA
to reconsider.

"The agency is making the right decision during
difficult economic times," said Steinberg. "Struggling families who are
working to do the right thing in meeting their obligations shouldn't be
saddled with an extra, unnecessary burden."

CalHFA had previously said it believes that federal law bars renting in such cases.

So you have decided to file bankruptcy.
Now the question is, “Where do I file?”. Well, the answer to
that, in most cases, is simple. You file in the jurisdiction where
you have lived for the past 180 days. The Federal Code referencing
this, 28 USC 1408(1) states:

Except as provided in section 1410 of this title, a case
under title 11 may be commenced in the district court for the
district - (1) in which the domicile, residence, principal place of
business in the United States, or principal assets in the United
States, of the person or entity that is the subject of such case have
beenlocated for the one hundred and eighty days immediately
preceding such commencement, or for a longer portion of such
one-hundred-and-eighty-day period than the domicile, residence, or
principal place of business, in the United States, or principal
assets in the United States, of such person were located in any
other district [emphasis added]

Notice the language of the
statute states “been located for
one hundred and eighty days” instead of referencing where your
residence is. For the Middle District of Florida, where I
practice, that means if you were lived in Baker, Bradford, Citrus,
Clay, Columbia, Duval, Flagler, Hamilton, Marion, Nassau, Putnam, St.
Johns, Sumter, Suwannee, Union or Volusia County, in Florida, for the
past 180 days, then you would file in Jacksonville.

So, what happens if you have not lived
in the jurisdiction you are in for the past 180 days? Then you have
to look at where you lived for a majority of the past 180 days. That
could be where you currently reside, or it may be in another
jurisdiction. A jurisdictional map can be found at
www.uscourts.gov/courtlinks,
where there are 201 bankruptcy courts throughout the United States
and its territories.

Thursday, October 27, 2011

The Principal Paydown Plan proposed by the National Association of
Consumer Bankruptcy Attorneys (NACBA) is now under
serious consideration by congress thanks to Edward DeMarco, the
Acting Director of the Federal Housing Finance Agency, and
Representative Zoe Lofgren. I would like to extend a sincere thanks
to all who sign the petition. The following statement was
disseminated to the membership of the NACBA.

UNITED STATES CONGRESS

For Immediate ReleaseOctober 26,
2011

FHFA Director Praises Principal Paydown Plan
as “Promising” and “Credible”Pledges to Provide Members
an Assessment in Two Weeks

Washington, DC (Oct. 26, 2011)—During a meeting today
with 19 Members of Congress, Edward DeMarco, the Acting Director of
the Federal Housing Finance Agency (FHFA), praised a principal
reduction proposal by Rep. Zoe Lofgren and pledged to provide an
assessment within two weeks of how it could be implemented.

Rep.
Elijah E. Cummings, the Ranking Member of the House Committee on
Oversight and Government Reform, hosted the meeting with Rep. Dennis
Cardoza, Co-Chair of the Housing Stabilization Task Force, to discuss
additional measures to address the foreclosure crisis.

Members
lauded the latest move by FHFA. In response to DeMarco’s
comments, Cummings said, “If Mr. DeMarco actually works with us to
implement this proposal, it would be an important step to address
this crisis, especially on the heels of his announcement Monday that
he will implement the President’s plan to help responsible American
homeowners refinance at today’s historically low rates.”

Rep.
Lofgren stated, “I am encouraged that the Federal Housing Finance
Agency is considering a plan similar to the one I’ve long
advocated. Allowing homeowners to pay down the principal balances on
their mortgages more rapidly in conjunction with Chapter 13 filings
is a sensible solution. Linking this to the bankruptcy process
will help those who truly need it and avoid the administrative
failures that have plagued other modification initiatives. I believe
this plan is entirely consistent with FHFA’s obligation to minimize
taxpayer losses in Fannie Mae and Freddie Mac, and I look forward to
Director DeMarco’s answer two weeks from now.”

Rep.
Lofgren’s proposal would allow homeowners in Chapter
13 bankruptcy to pay down loan principal and reduce negative equity
during a five-year period with no interest. In exchange,
homeowners would agree to settle claims against servicers, thereby
avoiding litigation and reducing taxpayer liability.

During
today’s meeting, Mr. DeMarco said his legal team had already begun
reviewing the proposal. “Based on initial feedback,” he
said, the proposal “has a lot of promise,” “strikes me as being
responsible,” and appears to be a “credible way” to address the
crisis while recognizing various interests in mortgaged properties.
He committed to Members that he would provide a more detailed
assessment of the proposal within two weeks.

Today’s
meeting was a follow-up to a previous meeting Cummings and Cardoza
hosted on October
6, 2011, during which Members pressed DeMarco to
implement the President’s recent proposal to eliminate barriers
faced by underwater homeowners seeking to refinance their mortgages
at current market interest rates. DeMarco announced on Monday
that FHFA would be taking several steps to reduce these
barriers.

Cummings issued a release on Monday stating,
“I commend the President for proposing this idea in his speech to
Congress, and I thank Mr. DeMarco for listening to the concerns of
Members and their constituents. The changes announced today
will provide additional relief for middle-class Americans and an
important boost for our economy. But we must not stop here.
Economists warn that the housing crisis is ‘ground zero’ for the
economy and jobs, and this is only one modest step towards addressing
it.”

Tuesday, October 18, 2011

Is
filing bankruptcy expensive?

Well,
hold on, because the Judicial Conference of the United States adopted
a new court fee schedule on September 13, which will become effective
November 1, 2011. Yep, they need more money; as the revenue generated
by the fee change will go into the Judiciary’s budget.

The
new filing fees will be:

·Chapter 7: $306.00

·Chapter 11: $1046.00

·Chapter 13: $281.00

There
are also other fee changes. As of the writing of this blog, the
Middle District of Florida has not posted the new fee schedule.
However, with a little searching on the internet, I found a new fee
schedule posted for the Eastern District of Michigan that can be
found by Clicking Here.

Friday, October 14, 2011

Following is a recent letter I received from the National Association of Consumer Bankruptcy Attorneys regarding the Principal Paydown Plan.

Dear NACBA Member:On
Wednesday, we wrote to bring you up-to-date on activities of NACBA’s
Legislative Committee in support of the Principal Paydown Plan (PPP).
Just as that email went out, we learned that the PPP figured prominently
in a “call to action on housing” sent to President Obama by 32 members of the California delegation in the U.S. House of Representatives. The letter to President Obama reads in relevant part:“One
promising possibility would be a temporary reduction in the interest
rates of certain homeowners who file for Chapter 13 bankruptcy, so that
the entirety of their monthly payments would go to paying down their
principal balances for five years. Coordination with the bankruptcy
process would make these reductions more likely to succeed than other
types of loan modifications, while also limiting the program to those
who truly need it and avoiding the administrative failures that have
plagued many other initiatives. Such a plan could be implemented for
mortgages held by Fannie Mae and Freddie Mac, as we believe that such a
plan would be entirely consistent with FHFA’s obligation to minimize
taxpayer losses in the Enterprises. This plan could also be implemented
as part of the nationwide settlement currently being negotiated by a
group of state attorneys general.”The
endorsement by the California delegation of the PPP signals a growing
recognition among policymakers that Chapter 13 bankruptcy is an
appropriate forum for addressing the foreclosure crisis. On Thursday,
the Democrats on two House Committees -- Judiciary and Oversight and Government Reform
– included mortgage modifications in bankruptcy court (such as the PPP)
as an approach to fixing the housing market and the broader economy in
their suggestions submitted to Congress’ deficit reduction committee.
And, in correspondence last month with Members of Congress, Edward
DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA),
said NACBA’s PPP has “some attractive features” and indicated that he
has instructed his legal staff to study it further. A
number of NACBA members have taken the time to meet with their
lawmakers in recent weeks and months, either in Washington, at home, or
both, impressing upon them the harsh realities our clients face when it
comes to dealing with mortgage servicers in the hope of saving their
home from foreclosure. A growing number of lawmakers have agreed to
lend support to the PPP and to be helpful in any way they can to see it
implemented.If you have not already
joined in this outreach effort, we encourage you to do so. While our
team in Washington does a terrific job representing us before lawmakers
and staff, there is no substitute for hometown constituents providing
the local perspective on these issues. The relationship you will build
with your lawmakers will go well beyond the current foreclosure crisis
and be of tremendous help as we tackle other issues, such as student
loans and fraudulent mortgage claims. At the local level, our issues
become personal and we have an opportunity to illustrate the impact of
policy decisions on everyday people. Angie and Zach, working with our
legislative team in DC, are poised to help you set up a meeting and
support you throughout the process. Please contact Angie Thies-Huber, NACBA’s Field Director at (614) 929-5375 and Zach Manifold, NACBA’s Field Coordinator at (614) 317-7180. Thank you for your support of NACBA!

Wednesday, October 12, 2011

The National Association of Consumer Bankruptcy Attorneys has a proposal (the “Principal Paydown Plan”) to reduce mortgage balances and help increase home values, but they need your help in order to put it into effect. The Principal Paydown Plan would give bankruptcy judges the ability to force a loan modification of certain Chapter 13 bankruptcy debtors’ first mortgages.

They are making a Final Push to get signatures on a petition.

CLICK HERE to see a one-page explanation of how the Principal Paydown Plan could help [your clients/relatives/etc.]

Monday, October 10, 2011

Most people file a Chapter 7 bankruptcy
to discharge debts, and often are very concerned about long the
Chapter 7 will last. The good news is many of the protections
debtors are looking for when they file bankruptcy they receive upon
filing with the Court.

During consultations, almost everyone
wants to know how long the bankruptcy will last. This appears to be
an emotional question, and as such, I usually tell them everything
they will probably have to do in the case will be done during the
first 30 days, and explain the trustee will ask for documents during
this time, followed by a meeting with the Trustee, called a Meeting
of Creditors. Then its just a sit back and wait for the discharge.
But if the protection they are looking for is relief from collection
activities by creditors and debt collectors, then, as to most
creditors, that is immediate upon the filing of the bankruptcy
petition with the Clerk of the Bankruptcy Court.

The reason creditors and debt
collectors are unable to try to collect during bankruptcy is because
of something called the “automatic stay”. This is a stay ofcollection activities during the bankruptcy, and usually remains in
effect until one of the following occurs:

a lift of the stay is granted by
the court;

the case is dismissed; or

a order of discharge is entered
by the Court.

If this is not your first bankruptcy
filing, then the automatic stay may be limited in time unless
extended by the Court, or not put in place at all until ordered by
the Court. If you have previously filed, you should seek the advise
of a local bankruptcy attorney prior to filing regarding the
automatic stay, and how it applies to your particular situation.

There are situations when clients are
concerned about when they will receive their discharge. This usually
comes about from a creditor that really doesn't fully understand the
bankruptcy process. Many times a landlord will not want to enter
into a rental agreement until after the discharge has been entered.
The answer to this is a discharge is usually entered in 3 to 4 months
after the Meeting of Creditors, which is about 4 to 5 months after
filing.

For debts that are not discharged,
should there by any, the automatic stay is usually still effective
during the course of the bankruptcy; however, upon the automatic stay
being lifted, the creditors are then free to proceed with collection
efforts as to those non-discharged debts. In this case, debtors are
given some breathing room for the time the automatic stay is in
place.

Saturday, October 8, 2011

If you have rental properties with
tenants paying rent, do you ever wonder what would happen to those
properties, and rental income, if you were to file a Chapter 7
bankruptcy? Does a demand letter from the mortgagee for the rental
income mean all the rental income must go to the mortgagee? Well,
not necessarily.

Florida Statute Section 697.07(4)
states, “Upon
application by the mortgagee or mortgagor, in a foreclosure action,
and notwithstanding any asserted defenses or counterclaims of the
mortgagor, a court of competent jurisdiction, pending final
adjudication of any action, may require the mortgagor to deposit the
collected rents into the registry of the court, or in such other
depository as the court may designate. However, the court may
authorize the use of the collected rents, before deposit into the
registry of the court or other depository, to:

(b) Escrow
sums required by the mortgagee or separate assignment of rents
instrument; and

(c) Make
payments to the mortgagee.

The
intent of the statute is to provide additional security that the
property will have its taxes paid, insurance paid, and be maintained
to prevent the wasting of the property.

In
re: One Fourth Street North, Ltd.,
a 1989 bankruptcy case out of the Middle District of Florida, the
debtor was authorized to use rents to maintain the property and pay
its ordinary operating expenses. The court recognized Florida
intends for the assignment of rents to be made upon judicial
determination as to the mortgagee's rights to the rents.

So,
upon the filing of bankruptcy, you have the ability to petition the
court for a determination of how the rental income should be used,
how much should be sent to the mortgagee, and how much should be
deposited with the Court.

Friday, October 7, 2011

Recently, I received a call from a
local newspaper reporter asking about statistical information
regarding bankruptcies. That set me in motion to see if I could find
some statistics. The following is an article from the
National Bankruptcy Research Center.

The middle of the year offers two perspectives on bankruptcy filings.
In the short term, June filings were up from May (120,000 in June
compared to 115,000 in May). And because June is not usually a high
month for filings, this is a 10% increase on a seasonally adjusted
basis. But the broader perspective suggests less of a concern. Filings
were still lower than last year’s torrid rate (down by 5% from June
2010). And most importantly, filings for the first half of 2011 remain
substantially below filings for 2010, down by 8%.

Nationwide, 2011 filings to date amount to about 3000
filings per million adults, about one in every 330 people. But national
disparities show that this really is an average – reflecting starkly
higher and lower filing rates across the country. As has been true for
some time, the highest filing rates are concentrated in the Southwest
and a swathe cutting up from the Southeast. Thus, on a
population-adjusted basis, Nevada still has the highest rate by far,
more than twice the national filing rate (6345); Utah, Georgia, and
Tennessee follow (in that order), all with more than one and a half time
the national average. At the other end of the spectrum, six
jurisdictions this year have filings less than half the national
average. In ascending order, they are Washington, D.C., Alaska, South
Carolina, Vermont, North Dakota, and Texas. Texas’s place on that list
(with 1424 filings/million adults) is noteworthy, since its population
far exceeds that of all the other low-filing state’s combined. Also of
note among large states is New York’s remarkably low rate (1645/million
adults), only slightly more than half the national rate.

Another noteworthy trend is the sharp disparity in changes
in filing rates since last year. Confirmation that the fall in filings
has spread throughout the nation comes from the short list of states
with filing increases over last year: only Delaware and Utah (both up
by 10%). At the other end of the distribution, although most states
have seen filings fall, several states have seen truly remarkable drops:
filings are down by 29% in Vermont and by 20% or more in Washington DC,
West Virginia, and North Dakota.

The most interesting point in filing trends comes from
comparing Nevada and California. Although Nevada has had the highest
filing rate in the country every month since the beginning of 2010, its
filings during 2011 have fallen 16% this year compared to 2010. By
comparison, neighboring California’s 2011 filings are almost identical
to its 2010 filings. Its large population makes this important to
national trends: in June, for example, more than one in every six
bankruptcy filings nationwide was in California. The end result is that
California has steadily risen through the ranks this year so that by
mid-year its overall filing rate (4500 filings/million adults) is almost
one and a half the national average.

This analysis was performed on data collected by the
National Bankruptcy Research Center (NBKRC) by NBKRC contributor
Professor Ronald Mann of the Columbia Law School.

Wednesday, October 5, 2011

With the continuing bad economy, people
are finding themselves in a situation where their real estate values
are decreasing faster than their principal balance on their mortgage.
They also find themselves in a situation where their unsecured
debts, like credit cards and medical bills, with increased interest
rates on the debt owed, is becoming unmanageable. That is when they
start looking for answers to their debt problem with local bankruptcy
attorneys.

When one files bankruptcy, there are
certain things that the bankruptcy code allows one to keep, while
secured debts on personal property may be either surrendered,
redeemed, or reaffirmed. The amount of how much property one can
keep while filing bankruptcy varies state to state depending upon
their particular laws.

In Florida, if one has homestead
property, the homestead is exempt. That's right, you can keep your
home. However, if you are upside down, that is, if your mortgage
balance is higher than the value of the real property, then one can
simply avoid claiming the property as homestead and receive an
additional $4,000 exemption, known as a wild card exemption; that's
another way of saying you can keep an additional $4,000 of personal
property.

This sounds simple, however, there is
one trustee in the Jacksonville Division that has been sending
letters out to debtors telling them to vacate their house when it is
not claimed as exempt. How can he do that? Well, technically, the
trustee has a choice of either administering the property or
surrendering the property. This means the trustee has to either
maintain the property for the estate and, most often, sell the
property to receive funds to distribute to creditors, or surrender
the property to the debtor, as it has no value to the estate. The
real problem lies when the Trustee tells someone to vacate the
premises when the Trustee has no intention of administering the
property. That is, no one to maintain the property, pay expenses,
cut the grass, and sell it. This, theoretically, exposes the owner,
the debtor, to liability.

Tuesday, October 4, 2011

The National Association of Consumer
Bankruptcy Attorneys member only workshop is scheduled for this
October 28th and 29th in Colorado Springs, and
is being held at the historic Broadmoor. I understand that staying
at the Broadmoor is an event in itself. There are rooms set aside
for the event, at a convention price. The deadline for getting a
room at the discounted price is this Thursday, October 6.

For those that show up a day early,
like myself, there is a Cog Railway to Pikes Peak. It may be
interesting this year, as it looks like there is an early snow in
part of the country. It's the beginning of October and Pennsylvania
has already seen some snow. If that's the case, just think of what
there could be at 14,115 feet. If you do plan to go on the Pikes
Peak tour, you are cautioned about altitude sickness. I am from
Florida, about 14,114 feet lower than Pikes Peak, and really don't
know what I am in for. The highest I have ever been, in a
non-pressurized plane, was 12,500 feet, and at that altitude I was
becoming woozy.

While the sites might be beautiful, it
does look as if we are in for an early winter. Several parts of the
country have winter storm warnings today. It is certainly great to
get away from the heat, and having to run the air conditioner all
day. However, with the early winter comes the necessity of having to
heat your home. And with heating your home comes the fuel or
electric bills. Although gas prices have recently fallen, the price
of diesel is still about the same. Gas prices have fallen .$50 per
gallon, while diesel has only fallen about $.08 per gallon.

Even though the economy is still in
shambles, the level of bankruptcy filings has fallen off considerably
over the past month. With and early winter, we may be looking at a
resurgence in filings in order to handle the extra bills that pay
check to pay check people have either failed to budget for, or have
been unable to budget for. Also, in the past, one has been able to
borrow money to get by. Currently, money is extremely tight, and
those that used to borrow money may not be able to now. Those that
have depended on credit cards to get by over the holidays may find
that their paid down card now has a lower credit limit.

Don't forget, the cut off on the room
block at the Broadmoor is this Thursday, October 6, 2011.

Monday, October 3, 2011

The Florida Supreme Court put in place
a mandatory program wherein all homestead properties would have the
opportunity to participate in mediation, thereby smoothing out the
court title wave of foreclosures. It was expected to help the
caseload by having debtors presented with options to foreclosure,
such as deed-in-lieu, short sale, or mortgage modification.

On Monday, the Court ordered a review
of the mediation program, which has had very limited success in
finding alternative avenues of keeping mortgagors in their homes. On
average, only 3.6 percent of the cases referred to mediation between
March 2010 and March 2011 were deemed successful in arranging an
agreement between the plaintiff and defendant.

Five judges and a court administrator
have been appointed to evaluate the success of the program, and make
a recommendation as to whether the program should be continued,
modified, to discontinued. The committee has until October 21 to
submit its findings. Public comments are being submitted to the
committee through today at www.floridasupremecourt.org.

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Jacksonville Bankruptcy Attorney -- J. Dinkins G. Grange, Esquire

I am a consumer bankruptcy attorney
helping people with their financial situations. As a bankruptcy lawyer, I help people find
various alternatives towards handling their financial problems, and
if needed, I can provide legal assistance to consumers seeking relief
under the bankruptcy code. I can be contacted by email at dgrange@grangelaw.org. I am available by appointment
during the week and most evenings.

I am located in Green Cove Springs on North Street, and Middleburg on Palmetto Street.

I am a member of the National
Association of Consumer Bankruptcy Attorneys (www.nacba.org),
Jacksonville Bankruptcy Bar Association, American Bar Association,
Florida Bar, and Jacksonville Bar Association.

I have also been designated a debt
relief agency by Congress and the United States Supreme Court and I
help clients file for bankruptcy relief under the bankruptcy code.

Disclosure:

We are a debt relief agency. We help clients file for bankruptcy relief under the Bankruptcy Code. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. This blog site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.